03.12.2012 15:44
Bewerten
 (0)

Buckeye Power, Inc. -- Moody's affirms ratings for Buckeye Power, Inc. and subsidiary; revises rating outlooks to stable

Approximately $184.9 million of securities affected

New York, December 03, 2012 -- Moody's today affirmed the ratings of Buckeye Power Inc. (Buckeye), including all senior secured ratings at A2 and the issuer rating at A3, and revised the rating outlook to stable from negative. At the same time Moody's affirmed the ratings of Buckeye's financing subsidiary, Buckeye Power Generating LLC (BPG), including the Baa1 senior secured term loan rating and Baa1 issuer rating, and revised the rating outlook to stable from negative.

RATINGS RATIONALE

"The affirmation of Buckeye's ratings and the change to a stable rating outlook reflect Moody's view that the cooperative's trend of weakening credit metrics due to debt financing of a now completed heavy capital program has bottomed out", said Kevin Rose, lead analyst for Buckeye. "Moody's believes that Buckeye's credit metrics will improve over the next several years as it enters a period of significantly lower capital expenditures that will result in positive free cash flow", Rose added. Steps taken by Buckeye to improve its liquidity by supplementing internally generated cash flow with a four-year committed $200 million unsecured credit facility with a syndicate of six banks led by National Rural Utilities Cooperative Finance Corporation (NRUCFC) is also considered a credit positive factor.

The affirmation of BPG's ratings, which maintains the one-notch difference between the issuer ratings of Buckeye at A3 and BPG at Baa1, and the change to a stable rating outlook for BPG reflect the subordination of the debt taken on by BPG to finance Buckeye's investment in Ohio Valley Electric Cooperative (OVEC; Baa3 senior unsecured, stable outlook). The cash flow to service the BPG debt is received from Buckeye under the terms of a purchased power agreement between the entities and as such, we view the rating of BPG as being linked to that of Buckeye. While the BPG investment in OVEC represents an important component of Buckeye's overall electric generating profile, the debt at BPG is not specifically guaranteed by Buckeye and as such could represent a junior claim relative to obligations under Buckeye's existing mortgage indenture.

Other long-standing credit positive traits underpinning Buckeye's investment grade credit profile include the cooperative's self-regulated rate-setting business model, the predictable revenue streams under long-term wholesale power sales contracts in place with its members, its competitive wholesale electric rate, and the ability to meet a significant amount of its members' power needs with owned electric-generation assets. With significant environmental-related investments completed in recent years, the predominantly coal based generation portfolio is currently well positioned to continue providing competitively priced base load power to its members as existing rates include the cost effects of these investments.

As the more moderate prospective capital spending program unfolds during 2013-2017, Moody's anticipates that Buckeye's debt level will decline so that its funds from operations (FFO) to debt and equity to total capitalization metrics will be restored to at least 6% and 20%, respectively, by FY 2014. These levels are in line with the A rating category under the U.S. Electric G&T Cooperative Rating Methodology. The anticipated improvement in credit metrics also assumes continuation of expense reduction initiatives, benefits from reduced OVEC demand charges following extension of the inter-company power agreement, and other restrictions on certain general and administrative spending. Moody's also incorporates a view that member rate increases will be implemented in a timely manner, if necessary, to achieve anticipated improvement in credit metrics and maintain currently adequate liquidity. To the extent that external financing requirements may develop, Moody's expects that Buckeye will follow its past practice of relying on loans from RUS and other sources, including loans from CoBank and NRUCFC, to meet its needs.

Buckeye's ratings could be upgraded over the next 18 to 24 months if key metrics improve beyond current expectations such that FFO to debt and equity to capitalization can be maintained in excess of 8% and 22%, respectively, for a sustained period. Given our view about the linkage to Buckeye's rating, we would expect BPG's rating to be upgraded if there is a positive rating action at Buckeye.

Buckeye's rating could face downward pressure if its credit metrics do not improve as anticipated so that FFO to debt and equity to total capitalization return closer to 6% and 20%, respectively, on a sustainable basis. Given our view about the linkage to Buckeye's rating, we would expect BPG's rating to be downgraded if there is a negative rating action at Buckeye.

Headquartered in Columbus, Ohio, Buckeye Power, Inc. is a not-for-profit electric generation and transmission cooperative owned by and supplying power to its 25 distribution cooperative members in the state of Ohio. Buckeye owns approximately 2,400 MW's of electric generating capacity and reported revenues of $627 million in fiscal year 2012. Buckeye Power Generating LLC is a special purpose financing vehicle, which is wholly-owned by Buckeye Power, Inc.

The principal methodology used in this rating was U.S. Electric Generation & Transmission Cooperatives published in Decemeber 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Kevin G. Rose Vice President - Senior Analyst Infrastructure Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653A.J. Sabatelle Senior Vice President Infrastructure Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ("MIS") AND ITS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY'S ("MOODY'S PUBLICATIONS") MAY INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND MOODY'S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY'S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY'S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED,DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error negligent or otherwise or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

MIS, a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations -- Corporate Governance -- Director and Shareholder Affiliation Policy."

Any publication into Australia of this document is by MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657, which holds Australian Financial Services License no. 336969. This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001.

Notwithstanding the foregoing, credit ratings assigned on and after October 1, 2010 by Moody's Japan K.K. ("MJKK") are MJKK's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities. In such a case, "MIS" in the foregoing statements shall be deemed to be replaced with "MJKK". MJKK is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO.

This credit rating is an opinion as to the creditworthiness or a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to make any investment decision based on this credit rating. If in doubt you should contact your financial or other professional adviser.

Artikel empfehlen?
Für den Live-Chat können Sie sich mit Ihrem finanzen.net-, Facebook- oder Twitter Account anmelden. Um immer die neusten Beiträge zu sehen, stellen Sie bitte "Neuesten" ein.

Private Krankenversicherung Tarifvergleich

Heute im Fokus

DAX leicht im Plus -- Alibaba plant Börsengang für Mitte September -- Apple-Deal mit Kreditkartenfirmen für iPhone-Bezahldienst -- Iliad sucht Investoren für höheres T-Mobile-US-Gebot

Deutscher Staat erzielt Milliarden-Überschuss. Deutsche Wirtschaft legt Rückwärtsgang ein. Verhandlungen über Kosten für Notstromreserve dauern an. Pilotengewerkschaft lässt Streiks bei Lufthansa offen. EU auf dem Weg zu neuen Sanktionen gegen Russland. SAP kann auf niedrigere Strafe im Streit mit Oracle hoffen.
Welche Billig-Airline ist die beste der Welt?

Diese Aktien sind auf den Kauflisten der Experten

Beste Produktmarken

Angesichts möglicher Streiks bei der Lufthansa und der Bahn werden die Forderungen nach einer gesetzlichen Lösung lauter. Wie stehen Sie dazu?
Abstimmen
Direkt zu den Ergebnissen

Anzeige